Acquisitions have remained one of the key strategies for Ingram Micro Inc. IM to enhance its geographical reach as well as product portfolio. Recently, the company acquired two European companies — CANAI Group and Clarity Technology — which are likely to expand its expertise in mobility lifecycle services. The financial terms of the deals have not been made public.
The technology distributor’s Ingram Micro Mobility division is a worldwide leader in mobile device lifecycle services. The division helps customers in forecasting and managing supply chain lifecycles; create demand and access sales channels; customize the products; and provide supply-chain solutions. Through these services, Ingram Micro Mobility improves efficiencies, lowers costs and adds value to the mobility supply chain.
U.K.-based CANAI, founded in 2001, “specializes in retail, carrier and web-based trade-in processes, sustainable recovery, reuse and recycling of electronic products." The company’s fully accredited processes and facilities help end users, retailers, manufacturers and carriers to “optimize the asset value and utilization of used devices in compliance with regulatory recycling and disposal requirements."
Established in 2008, Clarity offers a wide “range of services for the mobility industry including reverse logistics, repairs, parts and accessory management and diagnostics and repair avoidance."
We believe that the recent acquisitions will help Ingram in expanding its customer base in the mobility market. Moreover, the two companies will help Ingram Micro gain new retail, carrier and OEM relationships within the telecommunications ecosystem.
Ingram Micro Mobility is one of the company’s fastest-growing and higher-margin businesses. In first-quarter 2015, the company registered a year-over-year growth of 27% in the segment mainly driven by a strong demand for mobile devices, cloud-based solutions and the continued addition of new products.
Strategic acquisitions have not only expanded Ingram Micro’s geographic reach but also broadened its product portfolio. Moreover, certain acquisitions have given the company a strong foothold in the mid-range enterprise market. Some of the significant acquisitions are Anovo, Brightpoint, Aptec Holdings, Promark Technology, SoftCom, CloudBlue and Shipwire.
These acquisitions have expanded the company’s presence in the high-margin products and services market that includes fee-for-service mobility device lifecycle solutions, traditional logistics solutions and cloud-based solutions. We believe that these acquisitions augment the company’s offerings and thereby help it to garner additional revenues.
However, not all is hunky dory at the distributor. While its services business is seeing encouraging growth, the company remains largely dependent on the PC market where shipments remain sluggish. IDC’s latest forecast of a 4.9% drop in PC shipments in 2015 — worse than the earlier forecast of 3.3% decline — paints a rather gloomy picture.
Currently, Ingram Micro carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Cirrus Logic Inc. CRUS, CEVA Inc. CEVA and eMagin Corp. EMAN. All these stocks sport a Zacks Rank #1 (Strong Buy).
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